Asia FX Gains on China Trade Hopes; Dollar Slips Ahead of U.S. Jobs Data

Most Asian currencies rose on Friday as sentiment improved after China signaled openness to trade talks with the U.S., while the dollar weakened ahead of closely watched U.S. payrolls data.

The offshore yuan firmed, with the USDCNH down 0.3%, after China’s commerce ministry said it was willing to engage in dialogue, provided the U.S. eases unilateral tariffs. Although no formal talks are underway, the announcement lifted hopes of easing tensions in the prolonged Sino-U.S. trade war.

Trading across Asia remained subdued due to regional holidays. Mainland Chinese markets stayed shut and are set to reopen on Tuesday.

The Japanese yen underperformed, with USDJPY down just 0.1%, pressured by dovish signals from the Bank of Japan that cast doubt on further rate hikes this year.

Risk-sensitive currencies posted sharper gains. AUDUSD rose 0.6% despite soft Australian retail sales data, while USDKRW fell 1%, and USDINR dropped 0.9%, hitting a seven-month low.

The Taiwan dollar led gains, with USDTWD down 2.7%, touching its strongest level since 2011. The move was driven by optimism over U.S.-China relations and upbeat earnings from major U.S. tech firms, which could boost Taiwanese chip exports.

The Singapore dollar also advanced, with USDSGD slipping 0.4%.

Meanwhile, the U.S. dollar index dipped 0.2%, reversing some of April’s rebound as investors awaited the April nonfarm payrolls report. Economists expect a marked slowdown in job additions, capping a week of weak U.S. economic data and renewed concerns over policy uncertainty under President Trump.

U.S. GDP unexpectedly shrank in Q1, adding to signs of broader economic headwinds.